Gold (XAU/USD) Price Slides 4.5%: Key Levels to Watch Moving Forward

[Ben Graham]

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Gold is experiencing its first major pullback since mid-November as the precious metal is down 4.5% on the day. How far will the current pullback go and what are the key levels to watch?

Precious metals and commodities are falling across the board as profit taking and portfolio rebalancing ahead of the new year appear to be driving some volatility following the recent price surge ahead of Christmas day.

Commodity Market Snapshot

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Source: TradingView

Gold is down around 4.5% which is small in comparison to palladium and platinum which have both slipped around 17% and 15% respectively. Silver is also experiencing a double digit drop off on the day, currently down around 12.6% on the day.

Geopolitical Hope Aiding the Selloff?

Geopolitics had been driving some of the rally particularly from a safe haven perspective ahead of Christmas. US, Venezuela tensions appeared to be on course for a possible military intervention which stoked haven demand.

However, the US administration has clarified that they intend to turn up the economic pressure first and see if that yields the desired result.

Add to that cautious hope following comments from the U.S. government regarding progress in the Ukraine peace talks, which is acting as a slight drag on haven demand.

On Sunday, President Trump stated that he and Ukrainian President Zelensky are getting "very close" to reaching an agreement to finally end the war.

What Comes Next for Gold Prices?

Investors are closely watching for the release of the Federal Reserve's meeting notes on Tuesday to get a better idea of future interest rates.

Currently, traders expect rates to be cut twice next year, which is usually good for assets like gold that do not earn interest.

However, gold prices are already very high, and there is a risk they could fall if the Fed surprises everyone by keeping rates high or if large investment funds decide to sell their holdings.

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Technical Outlook - Gold (XAU/USD)

Looking at the four-hour chart below, the technical picture is intriguing to say the least..

The selloff today has taken gold into oversold territory while at the same breaching the 50-Day MA and testing the 100-day MA resting at 4321.

If Gold can hold above the 100-day MA bulls may regain interest as liquidity returns and push prices higher.

The pullback today could be down to profit taking and repositioning and in the current environment there appears to be little bullish pressure to stop the slide.

There is of course the probability that the selloff continues and brings lower levels of support into play.

Gold (XAU/USD) Four-Hour Chart, December 29, 2025

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Source: TradingView (click to enlarge)

Key levels to pay attention to include

• $4,321, 100-day MA
• $4,275, Previous Swing Low on December 16 Before the pre-Christmas Rally
• $4250, Previous Breakout Level

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